Weakness emanating from the European markets and less-than-expected results from Tata Consultancy Services (TCS) hit the Bombay Stock Exchange sensitive index, or Sensex, on Tuesday as the 30-share index fell nearly 277 points, or 1.6%, to close at 16,748, with IT and tech indices the worst affected, down by 3.7% and 3.1%, respectively.

The National Stock Exchange index Nifty closed at 5038 points, down 1.6%, or nearly 81 points.

TCS, which declared a 6.1% rise in net profit for the quarter ended September 30 on Monday, plummeted by 7.7% to settle at Rs 1,034 on the BSE.

“The rise last week was largely due to stability in the European markets and the fall today was largely on account of uncertainty there in the bank capitalisation programme and the Greek sovereign crisis,” said Deven Choksey, CEO and MD, KR Choksey Shares and Securities.

“People are withdrawing money from the system. In the US, banks are curtailing their proprietary trading desks, which is adding to the negative sentiment,” Choksey added.

Citigroup also announced that it would shut down its proprietary trading following sustained losses in the third quarter. Proprietary trading refers to trading in stock markets with shareholder money in deference to the Volcker rule that prohibits banks from doing so.

Choksey, however, said the fall in TCS scrip was more of a correction after last week’s rally that saw the company stock price close upwards by 8.2% on Friday.

TCS, however, did admit to a hit in its profit due to foreign exchange fluctuations.

Meanwhile, UBS has downgraded TCS to ‘sell’ from ‘neutral’ while maintaining its target price of Rs 1,000 on back of concerns about the spending outlook for the current fiscal year, especially in financial services.